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JAL to invest USD6.5bn on new aircraft over next five years: report

14-Feb-2012 11:33 AM

Japan Airlines (JAL) plans to invest around JPY500 billion (USD6.46 billion) over a five-year period commencing Apr-2012 in new aircraft and related spending, according to The Nikkei. JAL, which cut back on capital expenditures following a Jan-2010 bankruptcy filing, plans to retire older models and replace them with fuel-efficient aircraft, including around 30 Boeing 787 aircraft and around 12 737s.  The carrier expects to save JPY50 billion (USD646 million) in flight operating costs over five years as a result. JAL plans to obtain 35 787s and may order an additional 10 for FY2017 and beyond. The 787s will be deployed on new routes in FY2012, including services to San Diego and Helsinki. Overall, the carrier's fleet is expected to total 220 by the end of FY2016.

As previously reported, JAL reportedly plans to increase international passenger capacity by 25% by FY2016, according to reports in Mainichi Japan and The Nikkei. JAL is considering expanding transport capacity on international routes to US and European destinations with a particular focus on business passengers. The airline will also reportedly increase the ratio of consolidated operating profit to revenue to 10% or more, and a capital adequacy ratio of 50% or more. JAL also reportedly plans a 3% reduction in domestic passenger capacity.